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Structures, Systems and Cultures

Structure, Systems and Cultures are inherent part of any organization or a firm. An
organization with definite structure and systems with dynamic cultures has high
potential for success. Organizational structure is the allocation of roles and
responsibilities to different levels and sectors to achieve the goal and vision of the
organization. It determines the employee’s roles, powers and the position in the
organization.
Two types of structures are: Centralized and Decentralized systems. In the case of
centralized structure the decision making process if top down and the top level of
management monitors and oversees the various departments and management. While
in the decentralized system decision making power is delegated to the lower levels and
more autonomy is provided to foster leadership and faster decision making. Latter
ensures faster decision making and implementation. It can also be categorized into
Horizontal and vertical dimensions. Vertical organizations have different layers of
authority and power centers. It requires less management skills in employees and there
is quicker flow of information. Whereas in horizontal organizations tend to have a wider
span of control i.e. many subordinates under one manager or supervisor. Horizontal
structures tend to have better communications and are generally cost effective for an
organization due to not needing many managers. There has been a rise in
decentralized organizations, as is the case with many technology startups. This allows
companies to remain fast, agile, and adaptable, with almost every employee receiving
a high level of personal agency.

Customer base, business strategy, unique sense of products and service determines
the appropriateness of an organizational structure.
Types of structures:
1. Functional structures: Here the structure is arranged based on functional roles as
in various departments such as human resources, Marketing, finance and
accounting, etc. Roles are given based on specializations and skill of employees.
Airbnb for instance brought about radical change in their functional structure of
the company during coronavirus pandemic in the way that it laid off more than
20000 employees to cope up its loss making. However it also provided them with
incentives to nullify it’s negative image on people of having done huge
retrenchment of its employees.
2. Divisional Structures: Rather than dividing structure based on specializations
and skills, here roles are distributed across various branches wherever they’re
needed. For instance Airbnb has different has various retail outlets in different
cities.
 3. Matrix structures: It amalgamates both functional and divisional structures in the
way that a team of personnel with different skills are brought together for specific
projects.

Organizations have to decide which type of structure is best suited for their business
including its business, structure and industry. A successful organizations defines roles
of each employees and works their specialization for the right purposes. Not having a
formal structure in place may prove difficult for certain organizations. For instance,
employees may have difficulty knowing to whom they should report. That can lead to
uncertainty as to who is responsible for what in the organization. Having a structure in
place can help with efficiency and provide clarity for everyone at every level. That also
means each and every department can be more productive, as they are likely to be
more focused on energy and time.

Organizational Culture
Organizational Culture can be defined as “the specific collection of values and norms
that are shared by people and groups in an organization and that control the way they
interact with each other and other stakeholders from outside.”

Hierarchy, Market, Clan and Adhocracy forms the part of organizational culture.

Hierarchy: It makes structure well defined and stable. It is quite a formal culture which
emphasizes on control and authority to keep the organization running smoothly. This
type of culture offers security and stability.

Market
This type of culture is similar to Hierarchy Culture in the sense that it also focuses
somewhat on security and stability but it is driven results. It is a very competitive
environment to work in and there is very high focus on production.

Clan
The focus of this type of organizational culture is the employees of the organization. It is
a very friendly environment to work in. Loyalty is emphasized and employees are asked
to express themselves more openly. There is also a lot of importance given to
teamwork.

Adhocracy
This type of culture emphasizes thinking outside the box. Employees are given a bit of
latitude to experiment and to think differently. Creativity is encouraged and appreciated.
The atmosphere is dynamic and roles are not always defined. It is quite different from
the rest of the organizational cultures.

Organizational and culture are mutually inclusive and they have effect on each other.
Culture dictates how the company should be structured. So, no matter how big a
company, if its culture starts to disintegrate, it is only a matter of time till the structure
also follows. So when employees are supposed to work together on a task in the
constraints of a formal structure to reach a certain objective there are certain ways to
speak and interact, which in effect forms an organizational culture, where it may be
created knowingly or unknowingly by the employees. Organizational culture in some
way defines the organizational structure of an organization but the structure also
partially defines the culture of an organization.

Airbnb’s Prioritization to Survive the Pandemic: History has shown that successful
turnarounds are usually guided by a few key priorities. Chesky and the leaders at Airbnb
directed their efforts on the core business, customer emotions, and employee needs. As
a result, they’ve resurrected their rental inventory and future bookings and nearly
doubled the company’s value; and Airbnb is now expected to become the most valuable
hospitality firm in the world and one of the world’s 10 strongest brands. Adopt these
survival strategies and they will become your success formula.